Answer Happy

The Situation Analysis has five areas: Perceptual Map, DemandAnalysis, Capacity Analysis,Margin Analysis, and Consumer Report. You can divide the areasanyway you wish. Choose ananalysis that interests you, or if you prefer, assign the tasksbased on each team member’sfunctional area:• The R&D Department can complete the Perceptual Map (newand revised products will notsell if they are not inside a segment circle)• The Marketing Department can calculate the Demand Analysis(understanding current andfuture demand levels is crucial for accurate salesforecasting)• The Production Department can do the Capacity Analysis(understanding the costs associatedwith purchasing new Capacity and Automation is extremelyimportant)• The Finance Department can look at the Margin Analysis (cash fromoperations is factoredinto the balance sheet)• The R&D and Marketing Departments can complete theConsumer Report (poorly perceivedproducts can be revised, priced more aggressively, or promoted moreheavily)The Situation Analysis will give you an idea of where the marketcurrently stands and where itwill go. Answer the following questions on situationanalysis:a. On the Perceptual Map, all segments drift to the lower right.Which segment drifts at thefastest rate? Which drifts at the slowest?b. Each Segment’s Ideal Spot shows the buyer’s preferredcoordinates within the circle. Why isthe High-End Ideal Spot to the lower right of the segment center?Why is the Low-End IdealSpot to the upper left of the Low-End segment center?
c. Explain how increasing First Shift Capacity can reduce perunit labor costs.d. Automation reduces per unit labor costs but it has twodisadvantages. What are these?e. A product’s margin is determined by subtracting itsmanufacturing costs (labor and material)from its price. Logically, higher prices and lower labor andmaterial costs result in highermargins. Keeping in mind the Customer Buying Criteria, how wouldyou increase margins for aLow-End product? How would you increase margins for a High-Endproduct?